Nuggets can wait until the offseason and get a similar deal from NY. Melo ISNT going to walk. He will be signing the extension, plus NY can't sign him outright to a max contract, unless they renounce some of their other players and let Chandler walk (which they wont).
NY can lowball all they want, their players are e (as is evident by there 22-20 record in the Leastern conference).
Melo will be the first to flinch in this game of chicken. He won't get NY unless the up the offer by including another team.